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BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 1
Agricultural Solutions Sustainable growth through market-driven
innovations
BASF
Roundtable
Agricultural
Solutions
November 12, 2012
London
BASF Roundtable Agricultural Solutions, November 12, 2012
2
Disclaimer
This presentation includes forward-looking statements that are subject to risks and
uncertainties, including those pertaining to the anticipated benefits to be realized from the
proposals described herein. This presentation contains a number of forward-looking
statements including, in particular, statements about future events, future financial
performance, plans, strategies, expectations, prospects, competitive environment,
regulation and supply and demand. BASF has based these forward-looking statements on
its views with respect to future events and financial performance. Actual financial
performance of the entities described herein could differ materially from that projected in the
forward-looking statements due to the inherent uncertainty of estimates, forecasts and
projections, and financial performance may be better or worse than anticipated. Given these
uncertainties, readers should not put undue reliance on any forward-looking statements.
Forward-looking statements represent estimates and assumptions only as of the date that
they were made. The information contained in this presentation is subject to change without
notice and BASF does not undertake any duty to update the forward-looking statements,
and the estimates and assumptions associated with them, except to the extent required by
applicable laws and regulations.
3
1 | Introduction
Dr. Andreas Kreimeyer
Member of the Board of Executive Directors
2 | BASF Crop Protection
3 | BASF Plant Biotechnology
4
1 | BASF maintains good business performance
in Q3 2012
2 | ‘We Create Chemistry’ strategy on track;
Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth
opportunities with strong commitment to
innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 5
Q1-Q3’12
€59.1 billion
€9.8 billion
€7.1 billion
€7.4 billion
€3.9 billion
€4.25
€4.36
vs. Q1-Q3’11
+7%
+8%
+2%
+11%
(23)%
(23)%
(16)%
Favorable business development in Agricultural Solutions and Oil & Gas
Earnings in chemical activities did not match the previous year’s level
BASF maintains good business
performance in Q3 2012
Q3’12
€19.0 billion
€2.8 billion
€2.1 billion
€2.0 billion
€0.9 billion
€1.03
€1.19
vs. Q3’11
+8%
+4%
+5%
+6%
(21)%
(21)%
(22)%
Business Performance
Sales
EBITDA
EBIT before special items
EBIT
Net Income
EPS
Adjusted EPS
Sales development
Period Volumes Prices Portfolio Currencies
Q3’12 vs. Q3’11 7% (4%) (1%) 6%
Favorable business development in Agricultural Solutions and Oil & Gas
Earnings in chemical activities did not match the previous year’s level
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 6
Ongoing portfolio optimization
BASF is strengthening
competitiveness of Construction
Chemicals in Europe
Measures include:
- Adjusting business to declining
markets in Southern Europe and
Great Britain
- Enhancing overall efficiency and
customer focus
About 400 positions in Europe are
affected
BASF to acquire Becker Underwood
$1.02 billion (€785 million) purchase
price
Strengthens global crop protection
business
Leading global provider of
technologies for biological seed
treatment
2012 (E) Sales $240 million (€185
million)
Merger control approvals pending
Acquisition of equity in 3 producing
fields in Norway: Brage (32.7%),
Gjøa (15%), Vega (30%)
2P reserves of ~100 million boe
Rise in daily production in Norway
from 3,000 to 40,000 boepd
Statoil to receive
- 15% in development field Edvard
Grieg
- $1.35 billion
- up to additional $100 million
depending on success of Vega
Photo: Statoil
Becker Underwood Restructuring of
Construction Chemicals
Asset swap
with Statoil
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 7
Outlook 2012 confirmed
For the FY 2012, BASF aims to exceed the record levels of sales and EBIT before special
items achieved in 2011
BASF will strive again to earn a high premium on cost of capital
Chemical activities
- We do not expect demand to pick up in the fourth quarter 2012
- Therefore, 2012 EBIT before special items of chemical activities will come in below the level of the
previous year.
Outlook 2012
GDP: +2.2% (before: 2.3%)
Industrial production: +2.8% (before: 3.4%)
Chemical production: +2.9% (before: 3.5%)
US$/Euro: 1.30 (unchanged)
Oil price (US$/bbl): 110 (unchanged)
Assumptions 2012
8
1 | BASF maintains good business performance
in Q3 2012
2 | ‘We Create Chemistry’ strategy on track;
Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth
opportunities with strong commitment to
innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 9
Chemistry as an enabler
BASF has superior growth
opportunities: Innovation,
sustainability, Emerging
Markets, …
Long-term value creation,
ambitious financial targets
The #1 chemical company.
2011: €73.5 billion sales,
€8.4 billion EBIT bSI
#1- #3 in >75% of business,
present in >200 countries
Production in 41 countries,
6 integrated Verbund sites
10 years of outperformance
16% average annual stock
performance*
15% average annual
dividend increase, >3%
yield every single year**
Performance
BASF – The Chemical Company. We create
chemistry for a sustainable future
Perspective
* Nov. 2002 - Oct. 2012
** For 2002-2011
Ludwigshafen,
Germany
Antwerp,
Belgium
Nanjing,
China
Kuantan,
Malaysia Geismar,
USA
Freeport,
USA
Verbund site
Positioning
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 10
‘We Create Chemistry’ strategy defines
clear financial targets for 2015 and 2020
Grow at least 2 percentage
points above chemical
production
Earn a premium on cost of
capital of at least €2.5 billion on
average p.a.
Profitability targets Growth targets
2015
2020
Sales ~€85 billion
Sales ~€115 billion
EBITDA ~€15 billion
EPS ~€7.50
Double EBITDA to ~€23 billion
(compared with 2010)
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 11
Demographic challenges set the stage
for the future of the chemical industry
Nine billion people in 2050 but only one earth
Resources, Environment &
Climate
Food & Nutrition Quality of life
Chemistry as an enabler
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 12
We expand from chemicals to chemistry
Chemistry as key enabler for
functionalized materials &
solutions
Deep understanding of
customer value chains
required
Agricultural Solutions
perfectly matches BASF’s
focus on solutions business
1960 1970 1980 1990 2000 2010 2020
New molecules
Improved applications
Functionalized materials & solutions
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 13
BASF Crop Protection’s offering goes
beyond weed, disease and pest control
Commodity Prices
Sustai- nability
Risk management Exchange Rate
External factors
Frost Drought Water Nutrition Soil
Stress
Heat
Innovation beyond
Crop Protection
Weeds Diseases
Natural foes
Pests
Crop
Protection
Resources
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 14
BASF Plant Science –
Trait Technology Partner
Growers
Concept and strengths
BASF has focused on trait
technologies early on
Cutting-edge technology
and trait portfolio attracts
top partners (seeds, food)
Products to be marketed
via our partners’ channels
Partnership business model
provides high flexibility and
keeps asset costs low
Trait
Technology
Partner
Plant Science
Trait &
Seed
Partners
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 15
Multiple synergies between Agricultural
Solutions and BASF Verbund
Non-cyclical,
adds earnings
resilience
Technological
synergies
through
Know-how
Verbund
Agricultural Solutions
Strong
contributor
to BASF‘s
profitable
growth
Backward-
integration
and
sourcing
synergies
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 16
EBIT before special items
in billion €
0
0,2
0,4
0,6
0,8
1
2006 2007 2008 2009 2010 2011 2012Q1-Q3
Agricultural Solutions has increased its
earnings contribution to BASF sustainably
EBIT bSI more than doubled
from 2006 to 2011
New record in 2011: €810
million
FY 2011 record has been
already significantly surpassed:
Q1-Q3 2012: €1,004 million
Sustainably increased earnings
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 17
Strong business performance
Profitable growth over the past 5
years; high EBITDA margin level
since 2004
EBITDA margin target:
25% on average
Committed to sustain the high
margin level ...
... while continuing to invest into
innovation, leveraging BASF‘s
know-how Verbund
* Before Special Items.
2004 onwards according to IFRS. 2006 onwards excl. corporate cost
Agricultural Solutions has demonstrated
profitable growth and sustained margins
Sales to 3rd parties in billion €
EBITDA margin*
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 18
Oil & Gas
Agricultural Solutions
Chemicals business
0
2
4
6
8
10
12
2002 2004 2006 2008 2010
Agricultural Solutions is adding to BASF
Group’s earnings resilience
Agriculture not coupled to
chemical cycle
Agricultural Solutions delivered
substantial contribution even in
2009 trough
Agro adds to earnings resilience EBITDA by activity (excluding Other)
in billion €
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 19
in million €
from 3rd parties
64%
Sourcing of Top-100 raw materials* (by value) in 2011
from Verbund
36%
Make or buy
Verbund back-integration
– security & flexibility of supply
– market-based transfer pricing
– typically ~40% of the Top-100
raws come from Verbund
Sourcing synergies
– economy of scale via joint
BASF procurement
Capex
– capex will increase to >€250
M/y in 2012-2016 (on average)
– insourcing of advanced
intermediates
– capacity expansions
€515
million
Our growth in Crop Protection is backed
by a high level of backward integration
Capex in million €/a
0 100 200
2012-2016
2007-2011
* Without a.i. tolling, formulants, packaging
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 20
Total R&D expenditures 2011
in billion €
Large share of R&D spending committed
to Crop Protection, Plant Biotechnology
€1.6 billion R&D expenditures in
2011, ~€1.7 billion in 2012
2020 target: ~€30 billion in sales
with innovations <10 years
10,100 people; 2,800 projects
Research Verbund ~1,950
partnerships with universities,
start-ups, industry partners
Agro benefits from Know-how
Verbund synergies, especially
in process design, formulation
technologies, biotechnology
Functional
Solutions
12%
Other Corp. R&D
12%
Chemicals
8%
Agricultural
Solutions
26%
Plastics
9%
Performance
Products
21%
Oil & Gas
1%
Chemicals Business
Plant Biotech
11%
€1.6 billion
Strong innovation platform
21
1 | BASF maintains good business performance
in Q3 2012
2 | ‘We Create Chemistry’ strategy on track;
Agricultural Solutions is a key contributor
3 | Agricultural Solutions offers attractive growth
opportunities with strong commitment to
innovation
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 22
To stimulate further growth in Agriculture,
we pursue two promising Growth Fields
Resources, Environment & Climate Food & Nutrition Quality of Life
* Including growth fields still under evaluation
Consumer Goods
Chemistry as Enabler
Transportation Health & Nutrition
Construction Electronics Agriculture Cu
sto
me
r In
du
str
ies
Energy Management
Water Solutions
Wind Energy
Rare Earth Metals Recycl.
Heat Management
Enzymes Plant
Biotechnology Batteries for
Mobility
Lightweight Composites
Heat Management
Functional Crop Care
Medical Organic
Electronics
Gro
wth
F
ield
s*
Energy & Resources
Growth fields at different stages, >€500 million sales each expected at maturity
BASF Roundtable Agricultural Solutions, November 12, 2012
Verbund Synergies Agro Growth via Innovation Group Results Group Strategy 23
BASF Plant Science
founded (1998)
Acquisition of
CropDesign (2006)
Foundation of
Metanomics (1998)
2010 1995 2000
BASF Plant Science founded in
1998 as a subsidiary of BASF
Strong trait technology platform
was created, highly attractive to
partners
Prime example: Yield & Stress
collaboration with Monsanto
ranks #1 in Patent Asset Index
A strong trait technology platform Patent Asset Index* for Yield & Stress Traits
BASF Plant Sciences has generated a
leading technology platform
0 200 400 600 800 1000 1200
DuPont
Mendel
Bayer
Ceres
BASF/
Monsanto
2010
2009
2011
Partnership
with
Partnership
with
Partnership
with
* methodology: Prof. Ernst, WHU, based on the portfolio size (# patent families)
and competitive impact (# citations in other patents; market coverage)
24
Important contributions to BASF Group
– profitable growth
– stable earnings
Integrated in BASF Verbund
– cost synergies
– know-how synergies
Important role in reaching goals of our We Create Chemistry strategy
– customer focused solutions offer
– innovative & sustainable solutions
Agricultural Solutions is a star in our portfolio
BASF Roundtable Agricultural Solutions, November 12, 2012
25
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